|American Capital Receives Total Proceeds of $212 Million from Eight Exits|
Bethesda, MD - October 24, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that it has received total proceeds of $212 million from exits and prepayments of eight portfolio companies, realizing a total net loss of $1 million during the third quarter of 2005.
HMS Healthcare Inc.
In August 2004, American Capital invested $43 million in HMS, a holding company established for the acquisition of Sloans Lake Managed Care ("SLMC") and PPOM LLC, two independent non-risk access preferred provider organizations ("PPOs"). American Capital's investment took the form of senior subordinated debt, junior subordinated debt with warrants and preferred and common equity. KRG Capital Partners was lead equity sponsor.
For information about the HMS transaction click here.
Chronic Care Solutions Inc.
In November 2003, American Capital invested $39 million in subordinated debt with warrants in the recapitalization of Chronic Care. In July 2004, American Capital invested an additional $33 million in subordinated debt and preferred equity of Chronic Care to support its acquisition of the Pharmacy and Supply Division of Matria Healthcare Inc. KRG Capital Partners was the lead equity sponsor of Chronic Care prior to its sale.
For more information about the Chronic Care transaction click here.
MP TotalCare Inc.
In October 2003, American Capital invested $15 million in senior debt of MP TotalCare. American Capital's investment supported MP TotalCare's acquisition of Medical Holdings Inc., a leading national supplier of direct to consumer urological products.
For more information about the MP TotalCare transaction click here.
MBT International Inc.
In July 1999, American Capital invested $14 million in the senior debt, subordinated debt, common stock warrants and preferred stock of MBT. In May 2003, American Capital made a subsequent investment of $7.5 million in MBT for the acquisition of Midwest Musical Instrument Inc.
For more information about the MBT transaction click here.
Patriot Medical Technologies Inc.
In 1999, American Capital invested $6.5 million in senior and subordinated debt with warrants and preferred stock in Patriot. Patriot provides asset management and testing and repair services for diagnostic and other medical equipment. In 2003, American Capital was repaid its senior and subordinated debt investments in full. Over the life of its investment in Patriot, American Capital earned a 12% compounded annual rate of return on its investment, including the interest, dividends and fees earned over the life of American Capital's investment in the company.
Weston Solutions Inc.
In June 2001, American Capital invested $30 million in Weston. In June 2003, Weston completed a recapitalization, which resulted in Weston employees gaining 100% ownership of the firm by purchasing American Capital's equity interests in the company and repaying American Capital's original debt investments, resulting in a total gain to American Capital of $27 million. American Capital provided $12.8 million of senior subordinated debt to finance the employees' purchase of Weston. In the first quarter of 2004, American Capital received repayment of $5 million of the senior subordinated debt. Over the life of its investment in Weston, American Capital earned a 63% compounded annual rate of return on its investment. The 63% return includes the interest and fees earned over the life of American Capital's investment in the company.
American Decorative Services Inc.
American Capital's total net realized portfolio gains (excluding interest rate derivative agreements) from its August 1997 IPO, the latest four quarters and year-to-date through the end of the second quarter of 2005 were $35 million, $68 million and $40 million, respectfully. Since its IPO, American Capital has earned an 18% compounded annual return on 99 exits and prepayments of senior debt, subordinated debt and equity investments, totaling $1.8 billion of invested capital, including interest, dividends, fees and net gains on these investments. These exits and prepayments represent 30% of all amounts invested by American Capital since its August 1997 IPO.
For a chart showing American Capital's exited portfolio companies, click here.
ABOUT AMERICAN CAPITAL
American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $6.7 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to private and small public companies and through its asset management business is a manager of debt and equity investments in private companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.
As of September 30, 2005, American Capital shareholders have enjoyed a total return of 407% since the Company's IPO - an annualized return of 22%, assuming reinvestment of dividends. American Capital has paid a total of $868 million in dividends and paid $18.29 dividends per share since its August 1997 IPO at $15 per share.
Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit our website.
Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.
This press release contains forward-looking statements. The statements regarding expected results of American Capital Strategies are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.
SOURCE: American Capital Ltd.www.americancapital.com
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